You want to buy a new car. Your spouse thinks it’s a waste of money. You think you’ve got room in the budget for car payments. Your wife would rather earmark any extra money to an emergency or retirement fund. If you’re a spender and she’s a saver, this discussion could go on forever. So, how do you talk about a big purchase like this without ending up in a big fight?
There’s no easy answer to discussing financial matters with your spouse, which can be complicated. Although some couples agree on large purchases, many tend to view things differently. This is no surprise as spouses tend to enter a marriage with their own long-held beliefs about money and spending, says Andrew Comstock, CFA and president of Castlebar Asset Management LLC. To make money matters more challenging, one spouse tends to be the dominant financial decision maker. This can make it difficult to reach a compromise on that purchase if one spouse is used to making most of the couple’s financial decisions without a lot of input.
Finding a way to collaboratively discuss purchases is serious business, as disagreements about money can lead to divorce, according to a research study published in Family Relations. The study says arguments about money are the leading predictor of divorce. "It takes longer to recover from money arguments than any other kind of argument," stated researcher and study co-author Sonya Britt.
To help you avoid a volatile money meltdown with your spouse, take a look at our top four tips for peacefully discussing your next big purchase:
1. Be realistic: It’s a purchase, not an investment
Arguments will often arise when one spouse tries to convince the other that an expensive purchase – like a car or furniture – is a good investment. "Don’t try to spin it that way. Be honest," says Comstock. This may be the first time you’ve negotiated a big purchase and it’s important to be realistic and express how much you "want" the item for your enjoyment, he says.
2. Set up monthly money meetings
Every month, you and your spouse should sit down to talk money. During this time, you can discuss a big purchase that you or your spouse has in mind. This is a good time to talk about how much that car, patio furniture, upgraded sound system, or any other large purchase will cost. As talking about money can be stressful, experts recommend making these money meetings fun and relaxed, perhaps by ordering take-out and opening a bottle of wine. By planning ahead and knowing that this time is set aside to discuss finances, this takes the impulse out of it and helps promote compromise, says Comstock.
3. Sleep on your discussion and repeat next month
After you’ve initially discussed the purchase, it’s a good idea not to run out and buy that item – unless of course it’s something you need immediately and have both agreed on, like a new refrigerator because your old one quit functioning (and this type of purchase may preempt a scheduled meeting time and require dipping into an emergency fund).
Between now and your next money meeting you can research and prioritize the purchase, compare prices and figure out where you can buy the item for the lowest price. Also, give some consideration to your options for making that purchase (joint bank account, credit card, your own personal savings account, etc.) Be prepared to discuss these options with your spouse at your next meeting. This takes the impulse out of it and helps lead to compromise, says Comstock.
4. Review your budget together and be sure to give and take
When figuring out whether you can afford the next big purchase, it’s key that you and your spouse review your budget and make sure that buying that product will not put a strain on your finances. If so, it doesn’t mean you can’t purchase the item. But, it may mean you have to wait a few months. Another option: If you are the only one who wants this particular splurge, such as a spa weekend, you should independently save up for it.
Many financial experts recommend that couples have both joint and independent bank accounts. Oftentimes, couples agree that spouses can use funds in their individual accounts to buy whatever they want. If you are only contributing a small amount each month from your joint account to your individual account, this may mean saving up for your must-have weekend getaway.